Panama Covid-19 update – things getting serious with the road-closing protests as the football league suspends games… Mind you, in all my wandering around the city in the past few days I have not seen any protests, although the school around the corner is quiet, with the teachers on strike.
14 JULY 2022
INDIA UNDER SPOTLIGHT FOR ‘LAUNDERING’ RUSSIAN OIL
On 14 July, Nikkei Asia reported that US officials believe that Russian crude is being refined in India and then exported to the US and Europe, circumventing sanctions. It says that while it is difficult to identify the source of crude once it has been processed, nearly 24 million barrels of Russian crude oil arrived in India in May, more than 8 times the amount a year earlier. In June, the number remained high at more than 20 million barrels. It also says that while China has increased imports of Russian crude by a significant 55% in May from a year ago, it appears that China is buying undervalued Russian crude oil and gas for its own consumption and to add to what it has been buying from Europe and other countries.
MADAGASCAR AND HONDURAS JOIN MUTUAL TAX ASSISTANCE CONVENTION
Wolters Kluwer Australia has reported that these 2 countries have signed the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters. The Convention provides all forms of administrative assistance in tax matters: exchange of information on request, spontaneous exchange, automatic exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection.
ISLAMIC STATE MOZAMBIQUE’S REACTION TO FOREIGN INTERVENTION
On 8 July, an article from Dryad Global says that the Islamic State’s Mozambique Province, known locally as Al Shabaab (not to be confused with al Qaeda’s branch in East Africa) and its insurgency in Mozambique’s Cabo Delgado Province has remained resilient and adaptable. While the group has suffered major losses and its area of operations is much reduced since the group’s zenith in late 2020, its ability to adapt, expand and relocate to more vulnerable areas belies its deep entrenchment after nearly 5 years of war.
POLICY CHANGES RAISED BY NFT GAMING
On 12 July, the Brookings Institution published an article which considers a successful hacking attack on a website that gives players a financial incentive to stick with the game for the promise of regular income, by minting NFT that represent the game characters that players can use for battle, cultivation, or trade. The attack wiped out many players’ earnings. The article says that the hack is indicative of the risks built into the evolving nature of video game marketplaces and demonstrates the need for regulators to implement better monitoring and consumer protection schemes.
THE VULNERABILITY OF COASTAL WEST AFRICA TO A SPILLOVER OF EXTREMIST ACTIVITY FROM THE SAHEL
On 14 July, an article from Dryad Global starts by saying that, for a long time, many people did not believe that the threat posed by militant Islamist organisations and other armed groups would expand to the southern axis of the Gulf of Guinea. It was presumed they would remain in the Sahel, but the article says that those assumptions are being proven wrong.
SRI LANKA CRISIS TESTS CHINA’S ROLE AS FINANCIER TO POOR COUNTRIES
An article in the Wall Street Journal on 13 July said that China, Sri Lanka’s largest single creditor, offered a tempting alternative to the bitter medicine imposed by the IMF – just keep adding on new debt to pay off the old, according to current and former Sri Lankan officials. Sri Lanka agreed, and soon $3 billion in new credits poured in from Chinese banks in 2020 and 2021. Now, amid crushing debt and sky-high inflation, Sri Lanka finally decided in April to apply for IMF relief, but by then its economy was nosediving.
FOREIGN FIGHTERS, FOREIGN VOLUNTEERS AND MERCENARIES IN THE UKRAINIAN ARMED CONFLICT
On 11 July, the International Centre for Counter-Terrorism published an article which addresses the legal status of the foreign individuals joining the conflict in Ukraine, and some of the legal and political consequences of this situation. It provides an overview of some of the salient features of international humanitarian law (IHL), offers definitions of the terms ‘foreign volunteer’, ‘foreign terrorist fighter’ and ‘mercenary’, explains why these distinctions matter, and explores what lessons can be drawn from conflating or exchanging these different terms. It warns that while the IHL framework provides a concrete foundation through which fighters are classified during an armed conflict; mislabelling fighters as mercenaries, foreign volunteers or foreign terrorist fighters, individuals are subsequently not afforded the rights or protections they should under the applicable law.
SOUTH AFRICA: LOTTERY COMMISSION SHAKES UP LEADERSHIP AFTER CORRUPTION SCANDAL
On 13 July, iGB reported that the lottery regulator had announced a number of changes; including appointing human rights activist Barney Pityana as its new chairperson, as well extending current operator licence, in the wake of a 2021 corruption scandal.
MALTA: REGULATOR CANCELS GAMBLING LICENCE OF BET-BROKER BET-IT-BEST
On 14 July, iGB reported that the Malta Gaming Authority (MGA) has cancelled the licence sports betting business, BIB Limited, which operates the Bet It Best brand. When awarded a licence in 2017, BIB had claimed to be the world’s first-ever sports brokerage licensee.
TBML – IT’S A FOUR-LETTER WORD
An article by Oliver Bullough in Code on 13 July starts by saying that Trade-based Money Laundering is a dull name for an alarming concept, and involving techniques that avoid the FIU that are central to standard AML methods. It is said that expert analysis suggests perhaps 80% of all money laundering happens in this way, rather than through financial institutions.
NEW ZEALAND: ALLEGED KINGPIN TAKEN DOWN IN POLICE BUST INTO DRUGS AND MONEY LAUNDERING SYNDICATE
On 14 July, Newshub reported that police have taken down an alleged kingpin linked to a Vietnamese organised crime group after a huge police operation after a 9-month-long investigation into money laundering.
UK: SHARK FINS BILL 2022-23
On 14 July, the House of Commons Library published a briefing paper on this Bill, which would ban the import and export of shark fins, and is being introduced as a Private Members Bill is due to have Second Reading in the House of Commons on 15 July.
UK: 6 BORDER INNOVATION PILOTS AIM TO TRANSFORM THE WAY THE BORDER OPERATES
On 14 July, a news release from the Cabinet Office announced the Ecosystem of Trust pilots that will assess the use of technology, data and trusted trader relationships to minimise the administrative burdens and costs on traders. The model aims to create a more secure border, while limiting the need for compliance activities at the border, with traders allowed to perform more self-assessment at their premises. The pilots will run until the end of the year. Although unsaid, the UK has a need to find some remedies or alternatives given its post-Brexit trade problems, illustrated by such things as long delays at Channel ports, other supply chain difficulties, staff shortages and continued postponement of import control functions.
HOW NORTH KOREAN CRYPTOCURRENCY ABUSE IS EXPANDING
On 14 July, a Commentary from RUSI argues that countries must secure new and emerging gateways that are used to circumvent sanctions, as North Korea’s exploitation of cryptocurrency continues. It says that compliance standards among VASP vary widely, and plenty of vulnerabilities remain.
INDIAN COUPLE DETAINED AT DELHI’S INTERNATIONAL AIRPORT WITH 45 PISTOLS
On 13 July, WION reported that an Indian couple returning from Vietnam were discovered to be in possession of 45 pistols.
BIGGEST DISCOVERY OF DRUGS AT DUBLIN AIRPORT IN 4 YEARS
On 13 July, the Irish Times reported that Gardaí and Revenue’s Customs officers have seized 16 kg of cocaine which came about after an international operation also involving law enforcement in Germany and South America. 3 people arrested, 2 are employed in roles in the airport while the other person is suspected of flying in to the Republic with the cocaine. It is understood that the airport workers are employed by contractors.
EASY CREDIT APPS COME AT A HIGH COST IN MEXICO
On 13 July, Insight Crime reported that scammers in Mexico have yet again evolved their modus operandi by using express credit apps to extort users and drain their bank accounts. It seems that a raft of unlicensed credit apps offering immediate loans at high interest rates have become popular in Mexico. These apps do not require any documentation to be submitted by the user and transfer loan money in less than 24 hours. However, these are apps are part of well-coordinated extortion schemes, known as montadeudas (“mounting debt”), which ramp up pressure on customers to make them pay up.
EU CARBON BORDER ADJUSTMENT MECHANISM: IMPLICATIONS FOR CLIMATE AND COMPETITIVENESS
On 14 July, the EU Parliament Research Service issued a briefing paper on the carbon border adjustment mechanism (CBAM), which would require EU importers, as of 2026, to purchase certificates equivalent to the weekly EU carbon price.
SANCTIONS – HOW CAN FINANCIERS OF YACHTS AND PRIVATE JETS STAY AHEAD OF THE GAME?
On 14 July, an article from Dentons asks what about those financing such assets? What should banks and other financers look out for and prepare against in the context of the sanctions? As ever, it says, the devil is in the detail with sanctions. However, it provides some suggestions which should give financiers some food for thought and provide a useful starting point for considering how existing financings may be affected.
FCA: HOW THE UK WILL REGULATE FOR THE FUTURE
On 14 July, a release on Mondo Visione published a speech by the FCA Chief Executive, delivered at the Peterson Institute for International Economics. The highlights include that the FCA has invested heavily in data and technology and scan 100,000 websites for fraud every day; and that the US and UK will deepen ties on crypto-asset regulation and market developments – including in relation to stablecoins and the exploration of CBDC.
VIETNAM: CORRUPT COAST GUARDS MAY BE JAILED FOR 17 YEARS FOR GASOLINE SMUGGLING
On 14 July, RFA reported that military prosecutors have asked for prison sentences up to 17 years for 2 former commanders of Vietnam’s Coast Guard in the latest corruption cases that an analyst said could damage the force’s combat readiness in the South China Sea. The 2 were charged with taking bribes of from a gasoline smuggling ring in exchange of information about law enforcement ships’ coordinates.
US: 2 FOREIGN NATIONALS PLEAD GUILTY TO TRAFFICKING IVORY AND RHINOCEROS HORN FROM DRC
On 13 July, a news release from US DoJ advised that 2 DRC nationals had admitted that beginning in November 2019, they agreed to smuggle elephant ivory, white rhinoceros horn and pangolin scales to the US. They worked with a middleman to negotiate the sales and coordinate imports to Seattle.
POLICE ARREST AMSTERDAM CLOTHING BRAND FOUNDER FOR MONEY LAUNDERING AND DRUG TRAFFICKING
On 13 July, NL Times reported that the suspect is said to be the founder of the clothing brand, My Brand. Founded in 2010, the brand quickly gained popularity, selling at hundreds of stores in the Netherlands.
US: 4 CANADIAN NATIONALS CHARGED WITH DEFRAUDING US AND CANADIAN INVESTORS IN DIAMOND SCHEME
A DoJ news release on 12 July advised that the 4 Canadian men were charged for their roles in an alleged conspiracy that persuaded investors in the US and Canada to invest in diamonds and other jewellery through false and misleading information. They are said to have portrayed themselves as employees of Paragon International Wealth Management Inc, a Canadian investment firm that sold investors diamonds and other jewellery items via unsolicited phone calls to individuals in the US and Canada.
UKRAINE SEIZES ASSETS FROM OTC CRYPTO BROKERS FOR WORKING WITH RUSSIANS
On 13 July, Yahoo Finance reported that the over-the-counter (OTC) brokers are said to have illegally facilitated cryptocurrency purchases for users from Russia and Russia-occupied territories, and convert cash and non-cash funds into cryptocurrency, without paying taxes.
NIGERIA LINKS WITH SHIPPING ORGANISATIONS TO FIGHT GULF OF GUINEA PIRACY
On 13 July, Insurance Marine News reported that Nigeria and a coalition of global shipping stakeholders have launched a new strategy to end piracy, armed robbery, and kidnapping in the Gulf of Guinea. A newly-launched strategy was developed by the International Chamber of Shipping (ICS), BIMCO, Intertanko, Intercargo, Oil Companies International Marine Forum (OCIMF), and representatives of the Nigerian Navy and NIMASA, together making up the Nigerian Industry Working Group (NIWG). The intention is it to identify areas of improvement and reinforcement in order to eliminate piracy, and it is targeted at all stakeholders operating in the region.
UK: HIGH COURT ADJOURNED TRIAL INVOLVING OLEG DERIPASKA
On 14 July, EU Sanctions blog reported that, in May, the High Court adjourned a trial involving Russian oligarch Oleg Deripaska Deripaska because he cannot pay its lawyers for legal representation and the current legal team is coming off the record. His team successfully applied to adjourn to avoid an unfair trial.
THE FCA ROLE IN SANCTIONS COMPLIANCE
On 14 July, the EU Sanctions blog reported that the House of Commons Treasury Committee had requested information on the effectiveness of Russian sanctions from FCA and HMRC. The FCA response on 4 July explained the role of FCA in sanctions compliance. FCA does not enforce sanctions itself but might take action where a breach indicates weakness in a “relevant financial crime system and/or control”. It also shares information with other government bodies.
EU UPDATES RUSSIAN SANCTIONS FAQ
On 14 July, the EU Sanctions blog reported that the EU had updated 2 sets of guidance FAQ – on road transport, and on the Donetsk and Luhansk oblasts.
UK GOVERNMENT: FIRST REPORT ON THE NEW NATIONAL SECURITY AND INVESTMENT REGIME
On 14 July, Field Fisher published an article saying that the new Act came into force in January, and the article provides a summary of the government’s report on the operation of the regime, and the firm shares its own experience and learnings so far. The Act established a new national security regime in the UK, providing the UK government with sweeping powers to block, permit, or permit with conditions, transactions that give rise to national security risks. Although it cautions on reaching conclusions after only 3 months, the new system appears to be operating efficiently and within envisaged timelines.
WELL-KNOWN FRENCH ACTOR CLAIMS HE IS THE VICTIM OF €6 MILLION FRAUD BY ‘IRISH LORD’
On 14 July, The Journal reported that the fraud was allegedly committed by a man who held himself out to be an “Irish Lord from an ancient family” and an expert lawyer in maritime law. The actor obtained a temporary High Court freezing order preventing the defendant and several corporate entities he allegedly either controls or the ultimate beneficial owner of from reducing their assets below a value of €6 million. It is said that the offender had committed the fraud by using a network of companies he had appeared to have established in Ireland and other jurisdictions and is somebody who “goes by several different aliases”.
UK REGISTER OF OVERSEAS ENTITIES: HOW IT AFFECTS LAND TRANSACTIONS
On 13 July, the Land Registry posted an update of preparations for the implementation of the Economic Crime (Transparency & Enforcement) Act 2022. The Act prohibits any application being made to HM Land Registry to register an overseas entity as proprietor of land unless, at the time of the application, the overseas entity has obtained its Overseas Entity ID (OE ID) issued by Companies House.
UK: SERVED VIA NFT
On 13 July, Bloomberg reported that a High Court judge has given the go-ahead to serve legal documents over the blockchain ledger using an NFT for the first time. It explains that an NFT is a line of code on the blockchain that confirms unique certificates of authenticity and are typically used to prove ownership of a piece of digital art.
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